Assignment
(a) On January 1, 2008, T owned 10 unimproved lots with an adjusted basis of $10 and a FMV of $15 per lot. T hired X, a general contractor, to perform subdivision services in regard to the property e.g. planting, grading, surveying, draining, etc. X's bill for these services came to $10 per lot or $100. X agreed to accept 4 of these lots (now worth $25 per lot) as payment for his services. What result to T and X?
(b) On January 1, 2005, T purchased depreciable real estate from S for $100 T paying $50 in cash and giving a $50 purchase money mortgage due in 20 years for the balance. In 2010, T obtained another loan solely on the security of the property (without personal liability) in the amount of $120. As of January 1, 2011, T had taken depreciation deductions of $25 and had paid off $20 of the 2010 second mortgage. On this date, he sold the property to B who took subject to the $50 2005 mortgage and the $100 2010 second mortgage. In addition, B paid $25 in cash. What result to T and B?
(c) In 2005, T purchased land for $40 in cash. In 2009, the property was worth $200. T borrowed $150 and gave a mortgage on the property but did not incur personal liability thereon. Two weeks later, T contributed the property to charity which took subject to the mortgage. How should T treat the transaction?
(d) To start Vandelay Industries, several years ago George borrowed $10,000 from Cosmo. This month, Cosmo demanded repayment. George is a little short on cash, so he offered to pay Cosmo by transferring to him a tiny plot of land he owns in the Hamptons. George had purchased the plot a number of years ago for $6,000, but it is now worth $10,000. Cosmo agreed, and George deeded the land to him. What are the tax consequences to George and Cosmo?
(e) Jay owns 50 shares of stock in NBC Inc. Jay's 50 shares have a total basis of $1,000 and a fair market value of $50,000. Dave owns 100 shares of CBS, which have a total basis of $10,000 and a FMV of $50,000. If Jay and Dave trade all of their shares to one another, how much gain must each recognize?